Neoplastic transformation produces many changes in cell physiology. Some agents, such as growth-promoting hormones, produce some of these same changes. We have employed morphologic techniques to investigate the mechanism of action of growth-promoting hormones and transforming viruses, as well as the basic cellular mechanisms that regulate the functions commonly altered in neoplastic cells. Endocytosis is a process that regulates the interaction of cells with growth-promoting hormones, such as tumor cell growth factors, and the entry of transforming viruses. In the last year, our study of the pathway of endocytosis in cultured cells has revealed that epidermal growth factor (a growth-promoting hormone) (EGF) and transferrin (a plasma iron-binding protein necessary for cell growth) (TF) are co-internalized in the same pathway into human carcinoma cells through clathrin-coated pits at the cell surface, but diverge from each other in the trans-reticular network of the Golgi system. Cytochemical experiments using electron microscopy have shown that the receptors for EGF and TF are also internalized with the ligands. However, EGF and its receptor have been found to be delivered to lysosomes and degraded, whereas TF and its receptor are recycled intact back to the cell surface. The morphologic divergence of these two ligand-receptor types appears to involve the clathrin-coated pits of the Golgi system. Specialized morphologic studies of the coated pits of the cell surface have shown that images that appeared to be isolated coated vesicles are, in reality, coated pits still connected to the cell surface. Further, the change in shape of these pits has been found to be temperature-dependent. The nucleated erythrocytes of frog and turkey were examined and found to have clathrin-coated pits similar to all other eukaryotic cells, suggesting a possible role for them in the regulation of the surface hormone receptors that have been extensively studied in these cells.